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Colorado rurality an urban legend

Eight in 10 Colorado jobs are located in a band of just nine counties

Colorado, Wyoming and Montana all connote images of rural splendor punctuated by the occasional community.

What most people don't appreciate is how urbanized those and other Western states actually are, according to an analysis from Headwaters Economics.

"We have a very rural feel, but we are the most urbanized area of the country," said Ray Rasker, executive director of Headwaters, a research group in Bozeman, Mont., focused on rural economic development.

Nationally, three out of four people live in urban areas. In northeastern states, nearly nine out of 10 do so. Surprisingly, Western states match that concentration, and Colorado is no exception.

Nine counties in a corridor stretching from Colorado Springs to Fort Collins account for 80 percent of jobs in the state.

An additional six counties, home to mostly smaller cities in outlying areas, places such as Grand Junction and Pueblo, bring that total up to 89 percent of jobs.

Colorado's remaining 49 counties contribute just 11 percent of the state's total jobs, including several that started strong more than a century ago but haven't kept pace in the decades since.

Back in the late 1990s, think tanks like the Center for the New West popularized the idea of the "lone eagle," a highly skilled professional freed by technological innovation to live and work in remote areas.

But population dispersion never panned out, which Rasker attributes to the ongoing and never-ending importance of personal interactions that large cities can provide.

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The gap between urban and rural areas only widened after the 2008 recession, leaving economic developers in Colorado and other states struggling over what to do next.

"The rural and more outlying areas of Colorado haven't seen the same level of recovery," said Jeff Kraft, director of funding and incentives at the Colorado Office of Economic Development and International Trade.

For three decades, Colorado's Enterprise Zone Program has tried to promote development in distressed areas. When that didn't prove enough, rural areas were given enhanced incentives. And after rural areas fell even further behind, the legislature this year passed the Rural Jump-Start Program.

Jump-Start represents the economic development equivalent of a defibrillator for areas with no economic pulse and is modeled after a successful New York effort.

Approved businesses locating in Jump-Start areas will receive exemptions from state income taxes, state sales and use taxes on purchases and local and county business personal property taxes. All of those can last for up to eight years.

"There is a hard emphasis on new companies. Enterprise zones focused on existing companies. You need to be a startup, new division or relocating," said Ken Jensen, who is helping get the program off the ground.

But no incentive will lure a business to a place where there aren't enough workers. Many parts of rural Colorado face stagnant or declining populations and young adults who move away as soon as they can.

Jump-Start attempts to overcome the lack of workers in rural areas, something previous programs haven't addressed, by waiving state income taxes for the employees of participating businesses.

Local universities or colleges will oversee the program. They are required to focus the limited incentives on businesses that can transform a region's economy and not support another convenience store or utility pipeline.

Jensen said a test run will be made in three initial zones next year before the program rolls out statewide. The pilot zones haven't been identified.

For Rasker, the problem isn't so much about a lack of incentives but a much harder-to-fix issue: lack of connectivity. In this day and age, connectivity means high-speed broadband and airports with flights to major cities.

Headwaters divides Western counties into three groups — metropolitan hubs such as Denver, enjoying the majority of growth; outlying areas such as Vail and Durango, "connected" with air services that are advancing; and isolated areas, falling behind.

Club 20, a group focused on Western Slope issues, supports Jump-Start, said executive director Christian Reece.

Per capita income in Grand Junction is $19,692, compared with $52,357 in metro Denver, a difference so large that it makes it difficult to lure and retain workers.

"We really believe that we have an opportunity to grow our economy in a more diverse and sustainable manner by attracting the types of industries who would qualify under Jump-Start," Reece said.

But she also agrees with Rasker, that the right infrastructure needs to be in place. Rugged topography and sparse populations can make it infeasible to provide broadband services and can hamper access to health care, she said.

That, in turn, works against the advantages that rural areas can offer — a lower cost of living and a more tranquil pace of life.

Retirees, a growing share of the population, are especially drawn by that. And they don't need to jump on a plane for work. But they do need accessible health care, something many rural areas struggle to provide.

Kraft said the state is focused on connectivity but that it represents a chicken-or-egg question. Does growth generate connectivity, or will growth follow connectivity?

Rasker suggests the second scenario. Bozeman, a city of 40,000, offers direct flights to more than a dozen major cities, including Denver and New York. That, in turn, makes lone eagles and other professionals comfortable living there.

But not every rural community can have an airport, much less one with flights to multiple cities. Not every county can have a state-of-the-art hospital that reassures retirees looking to move there.

Rasker suggests there needs to be a discussion of how states and the federal government value rural areas, and what subsidies or support for these communities make the most sense.

"You have had, in the history of the West, these lights that flickered brightly on and off," Rasker said.

Butte, Mont., population 34,000, at one point was on par with San Francisco, with a population of 4.5 million.

Crashing copper prices dimmed isolated Butte's lamp, while San Francisco, on a bay facing the world, saw its light shine brighter and brighter.

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